Madoff's Many Crime Partners
According to Weissman and other sources at the AMEX, Madoff reneged on trades and front ran customer orders, meaning he would trade ahead of the customersâ€™ orders and thereby have them pay more to purchase a stock
[The Financial Meltdown]
In a previous article, "Lax Law Enforcement and Wall Street," I detailed the beginning of the corruption of the Securities and Exchange Commission (SEC) when Arthur Levitt, its then Chairman, decided to protect Bear Stearns for its involvement in the A R Baron Scandal.
Levitt protected another friend, Bernard Madoff. In 1998 and 1999 while I was providing information for what was to become an award-winning Business Week cover story, Scandal On Wall Street, I was apprised of illegal trading on NASDAQ.
Gene Weissman was a principal in Lieber and Weissman, a now-defunct day trading firm. Weissman died tragically in 2003 in an accident. Out of benighted self-interest, Weissman provided me with information concerning violations of federal securities laws by several firms. He provided this information because he knew that I was investigating the American Stock Exchange for violations of federal securities laws and he had close ties with the AMEX.
One of the firms that Weissman provided me information about was Madoff’s firm, BLM Securities, which made markets in NASDAQ stocks. According to Weissman and other sources at the AMEX, Madoff reneged on trades and front ran customer orders, meaning he would trade ahead of the customers’ orders and thereby have them pay more to purchase a stock—he in turn would profit by buying the stock at the offered price and then turning around and selling it to his "customers" at a higher price.
When I asked Weissman why he did not report Madoff to the SEC, he told me that Levitt was very friendly with Madoff and that any information he provided to the SEC would automatically be forwarded back to Madoff. As Weissman stated, Just as Levitt provided the AMEX with information that you gave to the SEC about violations of federal securities law at the AMEX.
Levitt denied allegations in a recent New York Post article that he protected Madoff while he was SEC Chair. I was told otherwise as early as 1998. And my sources have always been reliable; especially Weissman. His father was a name partner in Surnamer & Weissman, a New York Stock Exchange specialist firm.
Truthfully, it was Weissman, who first provided me with information about illegal trading at Harbor Securities.
But more of that in another article.